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Sony Ericsson Reports $466 Million Dollar Loss

April 18, 2009 in Wireless Industry News
SE gets hit by a 358 million euro loss.

SE gets hit by a 358 million euro loss.

Sony Ericsson sent out a press release earlier today that included a section called “Q1 Highlights”. There were only three bullet points. And the first was “Income before taxes was a loss of Euro 358 million (excl. restructuring charges)”…but we must remember, it could have been worse.

The good news was that the partnership’s cost-cutting measures, finished earlier than expected, and generated a savings of 300 million euros. Next up is yet another cost-saving initiative, which will cost 200 million euros but will reduce expenses by 400 million euros. Unfortunately, part of the savings will come from 2,000 layoffs.

In addtion, Sony Ericsson will be rolling out something called “Entertainment Unlimited”, which will remain a mystery due to the fact that they failed to give out any details. All we know is that the Idou, the world’s first 12 megapixel camera phone, will be the first bearer of the Entertainment Unlimited name. And that there’s another announcement on May 28th.

And now the bad news. Global market share for the duo dropped 2 points, to 6%. That’s huge. No specific reason was given for the fall, but I think it’s a fair statement to say that SE didn’t have any memorable phones in the past three months.

14.5 million cell phones were shipped out in Q1 2009, vs. 22.3 million at the same time last year (35% decrease). As a result, sales came in at a mere 1.7 billion euros (2.7 billion last year). The official reason:

“Sales decreased primarily as a result of continued weak consumer confidence and de-stocking in the retail and distribution channels.”

Profit margin also fell to the toilet, now sitting at 8%. At least the ASP (average selling price), of SE’s handsets remained roughly even at 120 euros (vs. 121 euros last quarter and last year).

According to a Forbes article about the results, Sony Ericsson is in a pretty bad spot right now, and will continue to be in a bad spot right up until sometime in 2010. Their reasoning is that the Idou will not arrive until late this year, until then the partnership has to cope with meager offerings in the high-demand smartphone category. Which means that the only action that’ll be happening this year will be the cost-cutting measures aka layoffs – not exactly a great way to kickstart a company’s earnings.

Sony Ericsson Q1 2009 Results




The Nokia Phone Blog » Blog Archive » LG Mobile Phone Division Reports 255 Billion Won Profit in Q1
12:47 am

[...] the crappiness of Sony Ericsson’s Q1 earnings report is undeniable, it’s good to see that other phone manufacturers are doing well enough despite [...]

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